The National Insurance Brokers Association (NIBA) is worried that brokers could be caught up in the Hayne royal commission’s final report detailing ways to reform the financial services sector.
CEO Dallas Booth says NIBA has already been in touch with the Australian Securities and Investments Commission (ASIC) and other relevant government and regulatory bodies to make a case for brokers ahead of the report’s expected release in February.
“Insurance broking has not been mentioned at all during [the] royal commission in terms of misconduct, which is a fantastic outcome for our members right across Australia,” Mr Booth says in a video reviewing this year’s top issues and the challenges ahead.
“The commitment to clients, the commitment to acting in their best interest, put us in a really good position. But we just have to be careful that recommendations in some of the other areas don’t spill across into insurance broking.
“I’m seeing the real challenge in this area in the mortgage broking space. It’s going to be very interesting to see what happens from the royal commission in their recommendations on mortgage brokers and whether any of that will spill across into insurance broking.”
Conversations with brokers undertaken by insuranceNEWS.com.au staff over the past week have revealed that while they are worried about being caught up in any recommendations aimed at intermediaries in other sectors of financial services, their greatest concern stems from ASIC’s strong support for a ban on “conflicted remuneration” like commissions.
Apart from ASIC, NIBA plans to also talk with the Federal Government and Opposition MPs about the value-add that brokers bring to the table for clients and the industry.
Mr Booth says the prospect of a federal election, which must be held next year and is widely expected to take place in May, is adding more pressure to a very challenging 2019.
“We are very conscious [about the election], so we want to make sure that the message of the work that brokers do, the value that brokers provide to their clients and the value brokers provide to the whole insurance process is well understood right across government well into next year,” Mr Booth says.
“In one sense an election campaign is already underway. It looks like the Government will go to the polls in May, so from February/March that will be a pretty serious time of high levels of political activity. We will be watching all that very closely to see what further reforms and what further changes come out from financial services.”
NIBA is also keeping a close watch on other areas that could impact the sector. These include the Treasury Laws Amendment (Design and Distribution Obligations and Product Intervention Powers) Bill 2018, which is still waiting to be passed by Parliament.
Other areas of concern are potential changes to unfair contract terms and disclosure.